New Governor Proposes Decreased Role for Judges, Lawyers in Workers’
Compensation

SACRAMENTO
(CAPITOL)—Gov. Arnold Schwarzenegger released a broad outline of his economic
recovery plan yesterday, calling for workers’ compensation insurance reform
which “emphasizes the importance of qualified medical professionals, rather
than attorneys and judges, to heal injured workers.”

The
governor, who took office Monday, also proposed a bond of up to $15 billion to
cover California’s
existing deficit and a cap on future spending.

“Reckless
overspending has brought our state to the brink of economic disaster,”
Schwarzenegger said, necessitating quick implementation of a three-pronged
approach which he dubbed the “California Recovery Plan.”

The
Republican governor’s plan would put a “fiscal recovery bond” on the March
ballot. Schwarzenegger did not specify the exact amount he would seek, but said
it could be “up to $15 billion.” If approved by voters and sold to investors,
the bonds would raise funds to pay for already authorized expenses which the
state’s current revenue can’t match.

Under
the bond plan, the budget would be balanced over a long term without having to
enact massive spending cuts or revenue increases next year.

“If
they vote yes, great,” Schwarzenegger said during his first press conference as
governor. “If they vote no, then we have to go and take on that challenge.”

Proposals
Tied

Schwarzenegger’s
plan states that the bonds could not be sold unless voters also approved a
spending limit. The limit, which would be written into the state constitution,
would cap spending to an as-yet-unspecified percentage of General Fund revenue.

“This
is to prevent future economic disasters,” he said.

The
third prong of his plan is to make changes in the workers’ compensation insurance
system. Lawmakers and Gov. Gray Davis enacted several changes earlier this year
to the mandatory insurance for employers, but Schwarzenegger—who is a business
owner as well as an actor-turned-politician—said those reforms did not go far
enough.

A
description of the California Recovery Plan distributed by the governor’s press
aides said Schwarzenegger’s proposals “do not scrap the work already done
earlier this year, but rather builds on it.” The plan would “[r]eform the
medical treatment side of the system, by infusing proven methods of delivering
medical care, like independent medical review, so that injured workers receive
faster, more consistent treatment so they return to work sooner,” the
description said.

Schwarzenegger’s
handout concluded, “It emphasizes the importance of qualified medical
professionals, rather than attorneys and judges, to heal injured workers.”

Savings
Predicted

Schwarzenegger
told reporters that his workers’ compensation reforms, developed with input
from more than 50 interested parties and from experiences in states with less
costly systems, would save employers approximately $11 billion in a year and
would “never” result in fewer benefits for injured workers.

“It
will be tough for the legislators, because a lot of them get a lot of money
from the trial lawyers,” the governor commented.

The
governor provided broad descriptions of his proposals and said his finance
director, Donna Arduin, would reveal more details within weeks.

One
of the governor’s proposals seeks the Legislature’s approval to provide local
governments with the approximately $4 billion they are projected to lose as a
result of Schwarzenegger’s cancellation of the recent tripling of the car tax.
He also indicated that he will propose at least $2 billion in budget cuts in
December, but that none of the cuts will affect education and none will result
in state worker layoffs during the holiday season.

“I
have a very clear vision of where I want to go,” Schwarzenegger said, but he
added that he wants to get more input from Democrats and Republicans in the
Legislature. He said he would “have both parties come together and present
their great ideas.”

At
least one state lawmaker indicated he will lobby for a “no” vote on the $15
billion bond because the money would have to be repaid with interest by future
taxpayers who might not see any benefit from the current government spending.
State Sen. Tom McClintock, a Republican from Thousand
Oaks who finished third in the election to
replace recalled Gov. Gray Davis, said Monday that he opposes the bond idea.

“I
believe that our children will have their own needs to meet without having to
pay for this generation’s partying,” McClintock said, according to Sacramento
Bee reporter Alexa Bluth, who was the press pool reporter allowed into a
Capitol luncheon with legislators and Schwarzenegger shortly after the
governor’s inauguration.

Assemblywoman
Jenny Oropeza, a Democrat from Carson
who chairs the Assembly Budget Committee, said she is “concerned about
incurring debt that we’ll be paying back over the next generation.”

“This
is a sizeable debt,” Oropeza said in a written statement. “What that means is
that paying off that debt takes another chunk out of our annual budget, and
that takes money straight out of our schools and public safety.”

Oropeza
voted for the current budget, which has a deficit that nonpartisan Legislative
Analyst Elizabeth Hill has pegged at $14 billion by the fiscal year’s end after
the governor’s repeal of the vehicle license fee increase. In a July press
release, Oropeza said, “The 2004-05 budget gap is the result of two things: The
Republicans were unwilling to budge on increasing taxes on the rich, and
Democrats were unwilling to cut further into critical services already cut to
the bone.”

Schwarzenegger
held his press conference in the Memorial Auditorium in downtown Sacramento,
minutes away from the Capitol. He said he could not use the traditional press
conference room in the statehouse because it is not large enough to hold the
large contingent of media, which included an Austrian reporter who interviewed
the governor in his native tongue after the formal press conference.

The
governor addressed a wide range of subjects, from steroids in sports to the
state hiring freeze. He said he would set an example for state frugality by
refusing his $175,000-a-year salary, and indicated he would oppose increasing
the sales tax to fund government expenses. The use of steroids by athletes
should be discouraged, but it “is not a governor’s issue,” he said.

The
conference was light-hearted, with Schwarzenegger complimenting one reporter’s
beard and glasses, then explaining that he was testing the advice given to him
by state Sen. Jim Brulte, R-Rancho Cucamonga, who instructed him to compliment
the media and lawmakers so they would say nice things and vote for his
proposals.

He also laughed and mimicked the yells of
“Governor! Governor!” from reporters seeking to ask him a question, then
thanked the media for helping him in his acting career and in his current
effort to encourage more public participation in the state government.
Schwarzenegger answered two questions after what had been announced as the
final one, explaining, “I promised this gentleman that I would answer his
question.”